According to the latest report from PricewaterhouseCoopers (PwC), the average UK adult now owes £33,000 compared with £17,000 seven years ago.
And this could continue to increase as the symptoms of the credit crunch start to show. A recent spending boom in the UK, assisted by easily obtainable borrowings, has led to a 9.5 per cent increase in consumer debt year-on-year, with personal debt including mortgages now totalling £1.3 trillion.
House price increases and the five interest rate rises introduced in the last 15 months may also have placed pressure on borrowers. However, with banks tightening credit lending criteria, people may find it difficult to apply for more credit should they need it. Some companies are reportedly turning down as many as 50 per cent of new credit card applications and this could have a particularly hard impact over the Christmas period, according to PwC.
One of the firm's partners, Richard Thompson, said: "There are tough times ahead for both consumers and credit card companies. Banks are continuing to take action in response to the rise in consumer debt by tightening their credit acceptance policies."
"Credit card net yields after charge-offs are at their lowest levels since the start of the millennium - the result of a highly competitive market and increases in charge-offs. This "lost profit" amounts to £4 billion for the market as a whole.
"PricewaterhouseCoopers continues to believe that it is only a matter of time before annual fees on cards becomes the norm," he added.
Furthermore, with approximately 1.4 million people due to come to the end of fixed-rate mortgage deals in the next year, the problem could dramatically worsen as some face a repayment rise of 60 per cent if they are unable to find a competitive deal.
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, debt management advice
read our Guide to Getting Debt Free
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